LONDON (Reuters) - Britain’s top share index rose on Friday in choppy trade as oil stocks extended gains, bucking a broader risk-off move across markets after a U.S. cruise missile strike in Syria.
The blue chip FTSE 100 .FTSE index was up 0.6 percent at 7,349.37 points at its close, reversing earlier losses and posting a gain of 0.4 percent for the week.
The underlying oil price rose close to a one-month high after the U.S. fired dozens of cruise missiles at a Syrian airbase from which it said a deadly chemical weapons attack was launched this week. [O/R]
Broker Deutsche Bank was latest to turn positive on the European energy sector, which has struggled so far this year, upgrading it to a “tactical overweight”.
“The energy sector has only recently started to catch up with the move in the oil price – and should benefit if USD weakness leads to further upside for oil,” strategists at Deutsche Bank said in a note.
Likewise defence firm BAE Systems (BAES.L) was a top riser, up 2.4 percent, in line with U.S. peers Lockheed Martin (LMT.N) and Raytheon (RTN.N), which makes the Tomahawk cruise missiles used in the strike.
Precious metals miners also rose as investors fled to safe-haven assets such as gold, the underlying commodity. Shares in Randgold Resources (RRS.L) were the top gainers, rising 4.3 percent, and silver and gold miner Fresnillo (FRES.L) gained 1.8 percent.
Broker activity also drove the action on the single stock level, with shares in Wolseley WOS.L down 0.1 percent after HSBC cut its rating to “hold” on the heating and plumbing products supplier.
“We believe the business is reasonably fully valued. There are, perhaps, other inflation plays in the sector with more upside for those who want it,” analysts at HSBC said in a note.
ITV (ITV.L) was another faller, down 0.5 percent after JP Morgan cut its rating on the stock to “neutral” from “overweight”, citing further weakness in UK advertising trends.
UBS was less positive on online grocer Ocado (OCDO.L), which dropped 5.4 percent after UBS cut it to “sell”.
“We believe the market is moving against Ocado,” analysts at UBS said in a note, citing growth rates slowing in online grocery and challenges from an inflationary environment.
Reporting by Kit Rees; Additional reporting by Danilo Masoni; Editing by Toby Davis